Home Business How Much Should You Be Spending on E-commerce?

How Much Should You Be Spending on E-commerce?

Online advertising is a must for ecommerce. However, choosing the right platforms and creating a proper budget can seem a little confusing for even the most seasoned advertisers. Marketers can easily get swept away in the wrong direction easily if they are not paying attention. This could mean disaster for your ecommerce business. It takes money to make money. You have to work your overall budget by calculating your minimum and maximum marketing budget.

Take 10% of your project annual gross revenue and multiply it by your average transaction markup. Repeat this calculation using 12% of your project annual gross revenue. Deduct your annual cost of occupancy from each of the totals. The totals remaining would be your minimum and maximum budget for advertising.

This is just a rough guideline and you should find a budget that works for you. It will take some time to scale your business from one level to another so you need to have some patience with this marketing. This article will be all about where you should be spending money on advertisements and how much. This will include the following marketing costs –

  • Google ads
  • Facebook ads
  • Instagram ads
  • Email marketing
  • Site Improvement

How much should you spend on google ads?

It depends on what your niche, your brand, and your budget are. There is no average CPC amount for google ads as a whole I would like to recommend you that work up a budget of only $1000 per month for google ads. But Start at a minimum of $120. Ecommerce businesses cannot survive without harnessing the power of Google to bring traffic to your store.

How much should you spend on Facebook ads?

Does Facebook advertising revenue continue to soar? It shows little interest in the few in-house problems and media scandals that popped up this year. The average CPC for Facebook is around $1.86. But this will depend on a lot of factors like competition and location. You should put more budget into the winning ads. This should include Facebook remarketing and dynamic product ads. Do read Facebook ads guidelines very thoroughly.

How much should you spend on Instagram ads?

It has been researched that last year $6.8 billion was spent on Instagram ads worldwide? This was an increase in revenue. With increased revenue came increased competition. According to specialists in marketing hub, you can pay anywhere from 20 cents to $2 per click. Again this is based on actual advertising spend on the platform and does not include external expenses.

There is a lot to consider when deciding how much you should spend on Instagram ads. Not only with CPSs vary on things like placement but you will need to look at high CPCs that are bringing in the sales as you may find that high cost could also mean high reward.

How much should you spend on email marketing?

Email marketing is a solid way to boost up your sales and marketing. So how much should you spend on email marketing? Whatever you can afford is the answer. This should not come to you as a surprise as you are spending money on email marketing. Make a budget every month for how much email marketing you will do that month and stick to it.

Your ecommerce store should collect emails from customers when they checkout. Also gather emails from people related to your niche and send emails to them to let them know you exist. This will let people know about you and some will visit your ecommerce store and also be your regular customers.

How much should you spend on Site improvement?

Day by day web technology updated? For example two or three years ago PHP, Larval or other coding was most popular CMS but now a days for ecommerce business word press with woo commerce is most popular other hand shopify also popular. So if your site build with old technology you need to upgrade today.

And also for ecommerce business image play a big role, users not see physical photo so he/she just take decision by seeing image. For that you need to optimize your image properly like, take picture with high resolution , for better understand you can use white background or for more lighting image you can use some image retouching technique by using some professional graphic design house.

You can spend less on a campaign and get no results or you can spend more on a campaign and rake in sales. Here in the second scenario you are spending more but in the first one you are throwing away money. Again you could have low CPC and high impression rate but not many impressions are converting because of poor remarketing strategies.

There are many factors that go into advertising spend and return on that spend that are not related to marketing cost at all. It is less about budget and more about what you are willing to pay for high performing marketing campaigns and how optimize to make sure you are not spending at all on ads that don’t bring you that ecommerce traffic. Here’s a recap of what we learned in this post with regards to average costs:

  • Google Search ads average CPC was $1.16 per click in
  • The average CPCP for Google Display was $0.46 per click in
  • Facebook’s average CPC is $1.86 per click
  • Instagram ad clicks will cost you anywhere from 20 cents to $2 per click
  • Email marketing has the best ROIs

The bottom line

Finally, marketing is a way to bring traffic to your store and increase sales but you should never spend blindly and never go over budget that you previously made. Remember there will be off months when almost no customer makes an order. There are some businesses that have a niche that only have customer on some specific months so spend wisely and I hope this article was helpful to you.

Imran Zahidhttp://digitaldailys.com
Hi I'm Imran Zahid a professional blogger having experience in blogging as well as freelancing. My basic researched on tech, health, entertainment, Digital Marketing and home improvement. I'd like to share my experience with all of you be connect to explore the knowledge. Thank you

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